🔒Hungry To Grow: Local restaurants seek expansion through multiple locations and franchising

Almost as soon as spicy sandwiches started rolling out of their first restaurant in New Haven in 2020, the founders of Haven Hot Chicken started looking for another location.

The second Haven Hot Chicken opened in Orange in 2021, followed by a restaurant in Norwalk this January. Now a fourth location is under construction in North Haven with plans to open in April — and Haven Hot Chicken co-founder Etkin Tekin is anticipating more.

“The intent has always been to grow a restaurant brand, rather than a single restaurant,” Tekin said. “That was the idea from the very beginning.”

After first testing out their products and processes through a series of pop-up restaurants across town, Haven Hot Chicken’s four founders — Tekin, Rob LaTronica, Craig Sklar and New Haven food-business veteran Jason Sobocinski — all took an active role in making sure their success was reproducible.

“We spent a lot of time really focusing and honing in on quality, and understanding how to do that at scale as well,” Tekin said.

The team spent a year and a half refining their concept before opening in New Haven, and felt confident in opening new locations soon after.

“We needed to make sure that our operations were consistent, standardized, routine and manageable by a management team other than the owners of the business,” Tekin said. “You need to have a good product, a great team — and you have to have happy guests.”

Haven Hot Chicken is one of several area restaurants that have decided to expand in recent years, with some venturing far beyond state lines.

Whether operating new company-run locations, franchising or adopting new hybrid models, entrepreneurs are looking to expand their brands and grow their customer base — and revenues/profits — in a tough market for restaurants.

First leg of expansion

Perhaps the most visible legacy New Haven restaurant on a growth spurt has been Frank Pepe Pizzeria Napoletana, with new locations sprouting up on a regular basis and advertised prominently along the Interstate 95 corridor.

In addition to the original pizzeria in Wooster Square, Pepe’s now operates 14 restaurants in seven states, with the newest location slated to open in Delray Beach, Fla., later this year, according to co-owner Jennifer Kelly, a granddaughter of Frank Pepe.

Pepe’s began adding locations in 2006, Kelly said, “after decades of loyal guests asking us to expand to other areas in Connecticut.”

The first leg of the expansion was to Fairfield County, followed by new Pepe’s locations in Manchester, West Hartford, Danbury and Waterbury, then Massachusetts, Rhode Island, New York, Virginia, Maryland and Florida.

All Pepe’s locations are company-owned and run by a team based in Meriden that includes Director of Quality Chris D'Auria and Director of Training Jen Hart, veteran employees with 15 years each of experience at the pizzeria.

All pizzaiolo – or pizza chefs – get 10 weeks of training on the restaurant’s signature coal-fired ovens before a new location debuts.

“Chris and Jen ensure that the training, ingredients and New Haven culture is present in every store we open,” Kelly said. “We work incredibly hard to ensure guests are getting an experience as close to New Haven as possible.”

New Haven-style pizza is also going national thanks to the efforts of the new owners of another Wooster Square legend, Sally’s Apizza. Descendants of Sally’s founders Sally and Flo Consiglio sold the iconic pizzeria in 2017 to a group of investors called Lineage Hospitality, who announced plans “to pursue the vision of bringing this legendary pizza to everyone.”

A second Sally’s location opened in Stamford in 2021, followed a third in Fairfield last fall. Coming soon are new restaurants in Wethersfield, Newington, Norwalk and Woburn, Mass., according to the company website.

Hybrid growth model

Growing on a larger scale is the New Haven-born Pokemoto chain, which started with a single restaurant on Audubon Street offering poke — a Hawaiian combination of raw fish, rice and toppings.

Entrepreneurs Thomas Nguyen and Gladys Longwa opened the first Pokémoto in 2017 and expanded to 13 locations by 2021, when the company was bought by Texas-based Muscle Maker Inc.

The company dropped the accent from the name and moved to a hybrid corporate/franchise model, reporting 29 open locations in 16 states and another 60 franchise locations in the pipeline as of January.

Pokemoto CEO Michael Roper explained the hybrid model in a statement: “While our growth strategy is focused on franchising, we also are building corporately owned and operated locations in key markets. These ‘seed’ locations are used to help the franchise sales process as most franchise partners want to visit a location and taste the food prior to becoming a Pokemoto franchisee.”

Another restaurant chain innovator is just down the road from the Haven Hot Chicken Orange location: Subway. Fred DeLuca opened his first sandwich shop in Bridgeport in 1965, creating his innovative franchise system in 1974 after hitting the 16-location mark.

At its peak in 2016, the Subway chain boasted more than 27,000 U.S. locations, its explosive growth credited to DeLuca’s standardized menu and legacy of strong corporate oversight and quality control.

Competition from newer sandwich chains and shifts in customer tastes have since culled the ranks of Subway franchises to around 20,000; the chain formally announced in February that it was exploring a sale that could value the company at more than $10 billion.

Expansion plans hold steady

Despite recent economic uncertainty, entrepreneurs are still seeking to expand their concepts, especially in sectors like restaurants, fitness, car washes and medical services, said attorney John Doroghazi, a partner in the litigation department at New Haven-based law firm Wiggin and Dana.

“Small businesses are always looking to expand once they have a good idea and a customer base,” Doroghazi said.

What has changed is the legal outlook for franchising, in which a business sells the rights to its name and idea to another individual or company.

Recent legislation set for a 2024 vote in California would set up a state council to establish minimum wage, working hours and working conditions for all franchises, an effort seen as a major threat by the industry even as other progressive states may seek to emulate the measure.

“If that passes and stays in effect it will fundamentally alter franchising, … and that's a really, really, really big deal,” Doroghazi said.

For the time being, sectors such as cannabis products are increasingly looking to franchises to expand their businesses beyond state lines.

Entrepreneurs often opt for a franchise model when they hit the 10- to 15-location mark, when the cost and logistics of setting up a corporate structure overseeing multiple locations may outweigh the benefits of direct control, Doroghazi said.

“If you've proved yourself — you can have more than one place where someone wants (your product) — then it’s really, do you want to make the investment to start building out a franchise system, or do you want to do it yourself?” Doroghazi said.

If Haven Hot Chicken ever decides to move to a franchise model, the general category of chicken sandwiches is hot for 2023, according to industry news site Franchise Wire.

“Franchise chicken brands are growing at an amazing rate,” according to the site, which name-checks national players like Al’s Hot Chicken, Nashville Chicken Coop and Shaq’s Big Chicken.

Haven Hot Chicken’s differentiator is its focus on top-quality sandwiches at a higher price point than fast food, putting it into the same category as chains like Shake Shack, Tekin said. The company employs 60 people across locations and is always hiring, he added.

Haven Hot Chicken’s neighbors at its North Haven location, in a newly built plaza at 146 Washington Ave., reflect its branding and perhaps its aspirations: It’s between a Starbucks (the coffee giant doesn’t franchise but operates more than 15,000 U.S. locations) and a Five Guys, a premium burger chain with 1,700 franchises nationally.

Tekin said he thinks the timing of Haven Hot Chicken's debut — during the worst of the pandemic — has prepared the company to forge ahead in a tough market.

“That was the first challenge that we faced, and frankly, that made us a lot stronger,” he said. “As we look at that mission and core values, it's important to us that we retain control over how locations operate, what culture they build, so that we can continue delivering on the expectations that we have.”